BoJ Governor Haruhiko Kuroda warned in the post meeting press conference “protectionism could affect not only the countries that are engaged (in trade wars) but the global economy as a whole through supply chains.” He added that the BoJ is “watching developments with grave concern.” For the moment, Kuroda said “it’s hard to say what specific impact this could have”. But he noted “there could be wide-ranging effects, given the complex global supply chain in the world economy.”
On monetary policy, he said that “we must maintain our powerful monetary easing given it will take time to achieve our inflation target.” And, if 2% inflation is met, “we won’t be continuing our current unconventional policy”. Also, he commented on the bond market activity since BoJ explicitly allowed 10 year JGB yield to move between -0.1% and 0.1%. He said “bond market trading activity has heightened somewhat… but trading tends to thin in August of each year, so it’s too early to gauge the impact of our July decision.”
